The Islamic College of South Australia has lost funding, after it failed to meet conditions imposed by the federal Education and Training Department.

The Adelaide school will no longer receive Australian Government funding from April 14.

The school failed to meet obligations to improve governance and financial management, and also report regularly on the progress of those changes.

Reports say a quarterly report on the college’s progress made it to the education department on January 30, a month late.

Funding was initially suspended in December 2015 after “serious governance deficiencies” were uncovered, but the taps were turned back on after the college gave a commitment to make improvements.

It then received $4 million of Commonwealth funding in 2016.

“It is disappointing that after the number of chances this school has been given and the constructive work the department has been doing with the authority since November 2015 the school has still failed to meet the reasonable standards and expectations placed on them,” Education minister Simon Birmingham said in a statement.

“This decision has not been taken lightly. However the department was left with no choice.”

“We've been seeing this governance saga unfolding a bit like watching a slow-motion train wreck,” he said.

“What I've seen is revolving door of directors on their board.

“I don't see any stability there and a school needs a stable governance structure, it needs a principal who's there for the long haul and it's really a bad sign when the principal bails.

“There's been so many opportunities for the school to get its management practices in order and they seem to have repeatedly not taken the hint and bailed on ahead.”

South Australian Education Minister Susan Close said plans were in place to help students leaving the Islamic College for other schools.

“We have to prepare for the school to close. The Federal Government has not made this decision lightly and we also have outstanding questions and haven't funded the school for a significant period of time,” she said.

“We take this Federal Government decision very seriously. It means that we will be ceasing to consider spending any [future] money from the State Government on this school.”